Federalism to Remain Key Issue for U.S. Supreme Court

If recent and upcoming cases are any indication, federalism is, and will remain, a critical issue before the U.S. Supreme Court.

That was the message of former U.S. Solicitor General Paul Clement when he addressed state officials at the CSG Leadership Forum in Washington, D.C., in June. The Council of State Governments has undertaken a multiyear effort aimed at strengthening CSG’s role in advancing the role of the states in our federal system. CSG’s Focus on Federalism Initiative is designed to be member-driven through the creation and staffing of a new Federalism Task Force and, at the direction of this new group, the deployment of CSG programming, products and services—through both current and new platforms—in support of this goal.

“It has come to pass that federalism has become something that gets enforced, at least in part, by the Supreme Court of the United States,” Clement said.

One of the great challenges in balancing the relationship between states and the federal government, said Clement, is the congressional response to constituent calls to address the problem-of-the-day, or issues Congress feels compelled to legislate on, even when the states are the more appropriate level for government action.

“The courts have really become one of the key protectors of federalism in our system—and the Supreme Court, in particular,” he said.

Clement cited the Affordable Care Act case as a case that highlights the importance of federalism to the current Supreme Court.

“The health care decision really does underscore that this is a court that cares about federalism principles,” said Clement.

While the Supreme Court decision did not rule the Affordable Care Act altogether unconstitutional, it found some components of the law exceeded the federal government’s power, Clement said.

For instance, the court struck down a section of the act that required states to expand Medicaid programs or be subject to the loss of all Medicaid funding, including both existing Medicaid funding as well as additional funding for the expanded components of the program. The court found this section of the act to be unconstitutionally coercive of states, and limited the federal government to withhold only new ACA Medicaid expansion funding to states that failed to comply with the expansion provision.

According to Clement, it was the first time the Supreme Court had ruled a law was unconstitutional on the grounds of coercive use of a federal spending program.

“If you don’t have that limit, then any other limit on federalism kind of goes by the wayside,” he said.

Supreme Court Justice Anthony Kennedy is often the deciding vote in federalism cases before the court.

“Justice Kennedy, as well illustrated in the health care case and as at least potentially illustrated by his questionings in the same-sex marriage argument, is very, very focused on federalism,” said Clement.

Kennedy’s interest in federalism isn’t new, said Clement. Citing opinions going back to Kennedy’s first term on the court, Clement noted his consistent references to “the integrity, the dignity and the residual sovereignty of the states.”

According to Clement, Kennedy’s interest in issues related to federalism suggests these issues will remain crucial to the Supreme Court.

“This is something that is a core part of his judicial philosophy,” said Clement, “and, I think, therefore, given his critical role on the court, this is really an issue here to stay.”

Clement noted upcoming cases that will come before the U.S. Supreme Court that address federalism issues. Among them:Bond v. The United States, which Clement will be arguing before the court this fall. This case considers questions related to the 10th Amendment.

In addition to specific cases that will be coming before the Supreme Court, Clement also identified several key emerging federalism issues facing state and federal policymakers, including:

Limitations to the coercive use of federal spending programs, including residual cases and questions resulting from the health care case;

The taxing authority of the states and the role of the federal government to manage disparate state taxing structures; and

The circumstances in which private individuals can sue states for failing to comply with federal spending programs.

Clement emphasized how critical federalism is to the current U.S. Supreme Court now and in the future. “I think federalism is exceptionally important to the Supreme Court of the United States,” he said, “and it is going to continue to be exceptionally important for the next couple of terms and the terms beyond that.”